The method of least squares is used far more often than any alternative procedure to estimate the parameters of a multiple regression model. Explain the basis for this method of estimation, and discuss why its use is so widespread.
Answer to relevant QuestionsIt is common practice to compute an analysis of variance table in conjunction with an estimated multiple regression. Carefully explain what can be learned from such a table. A study was conducted to assess the influence of various factors on the start of new firms in the computer chip industry. For a sample of 70 countries the following model was estimated: R2 = 0.766 where y` = new business ...Based on 25 years of annual data, an attempt was made to explain savings in India. The model fitted was as follows: y = β0 + β1x1 + β2x2 + ε where y = change in real deposit rate x1 = change in real per capita income x2 ...A market researcher is interested in the average amount of money spent per year by college students on clothing. From 25 years of annual data, the following estimated regression was obtained through least squares: where y = ...Transportation Research, Inc., has asked you to prepare some multiple regression equations to estimate the effect of variables on fuel economy. The data for this study are contained in the data file Motors, and the dependent ...
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